On the equivalence of weighted Country-Product-Dummy (CPD) Method and the Rao-System for multilateral price comparisons

The country-product-dummy (CPD) method, originally proposed in Summers (1973), has recently been revisited in its weighted formulation to handle a variety of data related situations (Rao and Timmer, 2000, 2003; Heravi et al., 2001; Rao, 2001; Aten and Menezes, 2002; Heston and Aten, 2002; Deaton et al., 2004). The CPD method is also increasingly being used in the context of hedonic modelling instead of its original purpose of filling holes in Summers (1973). However, the CPD method is seen, among practitioners, as a black box due to its regression formulation. The main objective of the paper is to establish equivalence of purchasing power parities and international prices derived from the application of the weighted-CPD method with those arising out of the Rao-system for multilateral comparisons. A major implication of this result is that the weighted-CPD method would then be a natural method of aggregation at all levels of aggregation within the context of international comparisons.

True measures of GDP and convergence

Widely used ''purchasing power parity'' comparisons of per capita GDP are not true quantity indexes and are subject to systematic substitution bins. This bias may distort measurement of convergence and divergence. Extending Varian's nonparametric construction of a true index gives the set of true indexes, including the new Ideal Afriat Index. These indexes are utility-consistent and independent of arbitrary reference price vectors. We establish bounds on the dispersion of true multilateral indexes, hence bounds on convergence. International price indexes understate both true GDP dispersion and, where prices are converging over time, the rate of true quantity convergence.

Peacebuilding in East Timor

This essay analyses some of the political, economic and social challenges of East Timer's transition to independence. It scrutinizes the ethical dimensions of building peace in a territory devastated by the combined effect of Indonesia's colonial occupation and the violent militia attacks of September 1999. The most difficult task ahead does not lie in the physical rebuilding of the territory-gargantuan as it may be-but in the more intricate and long-term rehabilitation of a traumatized society. The latter involves competing Timorese factions as well as a range of international actors, including the United Nations Transitional Authority, foreign governments, business institutions and various multilateral and bilateral donors. each having their own organizational leitmotifs and policy priorities. If not managed carefully, the reconstruction process could further exacerbate existing societal tensions and complicate the starch for peace and reconciliation. The essay identifies a number of crucial components necessary to counter such risks, including the need to promote popular participation in the rebuilding process. Without the legitimacy created by strong community involvement and grassroots participation in decision making, the task of national reconstruction may well become overwhelmed by conflict.

Australia, the United States and a 'China growing strong': managing conflict avoidance

How to deal with a rising China constitutes one of the most seminal challenges facing the ANZUS alliance since its inception a half a century ago. Australia must reconcile its geography and economic interests in Asia with its post-war strategic and historic cultural orientation towards the United States. It must succeed in this policy task without alienating either Beijing or Washington in the process. The extent to which this is achieved will shape Australia's national security posture for decades to come. Three specific components of the 'Sino-American-Australian' triangle are assessed here: the future of Taiwan, the American development of a National Missile Defence (NMD), and the interplay between Sino-American power balancing and multilateral security politics. The policy stakes for Australia and for the continued viability of ANZUS are high in all three policy areas as a new US Administration takes office in early 2001. The article concludes that Australia's best interest is served by applying deliberate modes of decisionmaking in its own relations with both China and the US and by facilitating consistent and systematic dialogue and consultations with both of those great powers on key strategic issues.

Organizational responses to a changing aid environment: the German Agency for Technical Cooperation (GTZ)

As a major European donor, German government development assistance faces a series of challenges. Recent political changes have raised expectations for demonstrable health outcomes as a result of German development assistance; there has been a deepened commitment to collaboration with other bilateral and multilateral donors; and partner countries are increasingly open to new approaches to development. German development assistance also reflects a new ethos of partnership and the shift to programmatic and sector based development approaches. At the same time, its particular organizational structure and administrative framework highlight the extent of structural and systems reforms required of donors by changing development relationships, and the tensions created in responding to these. This paper examines organizational changes within the German Agency for Technical Cooperation (Deutsche Gesellschaft fur Technische Zusammenarbeit) (GTZ), aimed at increasing its Regional, Sectoral, Managerial and Process competence as they affect health and related sectors. These include the decentralization of GTZ, the trend to integration of projects, the increasing focus on policy and health systems reform, increased inter-sectoral collaboration, changes in recruitment and training, new perspectives in planning and evaluation and the introduction of a quality management programme. Copyright (C) 2002 John Wiley Sons, Ltd.

Medical marijuana initiatives - Are they justified? How successful are they likely to be?

The principal constituent of cannabis, Delta(9)-tetrahydrocannabinol (THC), is moderately effective in treating nausea and vomiting, appetite loss, and acute and chronic pain. Oral THC (dronabinol) and the synthetic cannabinoid, nabilone, have been registered for medical use in the US and UK, but they have not been widely used because patients find it difficult to titrate doses of these drugs. Advocates for the medical use of cannabis argue that patients should be allowed to smoke cannabis to relieve these above-mentioned symptoms. Some US state governments have legislated to allow the medical prescription of cannabis, but the US federal government has tried to prevent patients from obtaining cannabis and threatened physicians who prescribe it with criminal prosecution or loss of their licence to practise. In the UK and Australia, committees of inquiry have recommended medical prescription (UK) and exemption from criminal prosecution (New South Wales, Australia), but governments have not accepted these recommendations. The Canadian government allows an exemption from criminal prosecution to patients with specified medical conditions. It has recently legislated to provide cannabis on medical prescription to registered patients, but this scheme so far has not been implemented. Some advocates argue that legalising cannabis is the only way to ensure that patients can use it for medical purposes. However, this would be contrary to international drug control treaties and is electorally unpopular. The best prospects for the medical use of cannabinoids lie in finding ways to deliver THC that do not involve smoking and in developing synthetic cannabinoids that produce therapeutic effects with a minimum of psychoactive effects. While awaiting these developments, patients with specified medical conditions could be given exemptions from criminal prosecution to grow cannabis for their own use, at their own risk.